Finding an affordable cure

Focus should be on supply of genuine generic drugs

Prime Minister Narendra Modi has hinted at bringing in a new law requiring doctors to prescribe generic medicines in place of costly branded ones. Mr Modi said patients were on most occasions completely unaware of what they were being prescribed and ended up paying exorbitant prices for drugs that were available at much lower price points. A generic drug is a duplicate of a drug whose patent has expired. Branded generics often add some tweaks to charge much higher prices. By forcing doctors to prescribe only the generic salt, Mr Modi hopes patients will have the option of buying a cheaper version, especially the ones for which the government has already capped prices. In the past the government capped the prices of 700 medicines, yet there is little evidence that such price ceilings have helped matters. For a variety of reasons, it is also likely that such a law may do little more than shift the problem of costly medication from doctor-patient interactions to patient-pharmacist interactions. 

For one, this is not a new idea — this was recommended by the Planning Commission’s High Level Expert Group on Universal Health Coverage five years ago — but there has been inadequate implementation in the past. Last September, the Medical Council of India, which registers doctors in the country and ensures minimum standards, sought permission from the central government to mandate that every physician would “prescribe drugs with generic names legibly and preferably in capital letters and he/she shall ensure that there is a rational prescription and use of drugs”. The previous government, under the United Progressive Alliance, pushed Central Government Health Scheme (CGHS) dispensaries to prescribe generic medicines to the “maximum extent possible”. But little changed on the ground. Secondly, at the heart of the matter is the information asymmetry that exists between a doctor and a patient. Big pharmaceutical firms routinely lobby with doctors to prescribe their brands of drug. The patient, completely unaware of the technicalities, blindly follows the prescription and often ends up paying more. Even if doctors can be compelled to follow such rules, a pharmacist can easily feign unavailability of the cheap generic and sell the costlier branded version instead. Studies have shown that it is the retailer’s margin that often plays the key role in deciding how much the patient pays for a drug. There is little reason to believe that the government will be able to enforce higher compliance by pharmacists than what it has been able to achieve with doctors. 

The third, and possibly the most crucial, issue relates to the quality of generic drugs made in India. Reportedly, just about 1 per cent of generic drugs sold in the country undergo quality tests. Last year, 27 medicines, including commonly used antibiotics, painkillers and anti-inflammatory drugs, had failed quality tests that were conducted in seven states. The 18 guilty companies included some of the country’s best-known firms.

While the prime minister’s intention is praiseworthy, just a law, with little ability to enforce it, will not yield results. One way to address the demand for more affordable medicines, which constitute over 70 per cent of overall health spending, is for the government to go in for bulk procurement of important drugs from quality generics manufacturers through central and state-level supply logistics corporations and their distribution through Jan Aushadhi outlets. But barring a few states such as Tamil Nadu, Kerala and Rajasthan, the results have been uninspiring. At present, there are only 1,000-odd such kendras functional in 28 states. Clearly, this is grossly inadequate for a country of India’s population.